According to the FASB Conceptual Framework, which of the following statements correctly describes the trade-off between the fundamental qualitative characteristics of relevance and faithful representation?

Information must be completely neutral to be relevant, even if it sacrifices predictive value.

Estimates used in accrual accounting may increase relevance by providing timely information but may decrease faithful representation due to measurement uncertainty.

Verifiability is a fundamental characteristic that overrides the need for relevance in financial reporting.

Faithful representation requires information to be free from error in all respects, prohibiting the use of any estimation methods.